Coal news and updates

COMPETITIVE feed-in tariff proposals will be the "bottom line" in awarding contracts for the inaugural proposed coal and gas fired power plants at the Coast, the government said yesterday.

 

Energy and Petroleum Secretary Davis Chirchir told the 22 companies battling it out to separately generate 960 megawatts of power from a coal fired thermal plant and 700MW liquefied natural gas plant that emphasis will be put on the least unit cost of power into the national grid.

 

The government, he said, was keen on cutting the cost of power by at least 40 per cent from the prevailing 18 US cents a kilowatt hour by end of 2016.

 

Chirchir said the companies with cost of power to the grid higher than the government target, which translates to about 10 US cents a unit, stood little chance of getting the tenders.

 

"We want to be a preferred low cost country in Africa for investors," he said when he unveiled the successful companies at Nyayo house. "You will win based on the feed-in tariffs. If your cost is not right to the economy, then you should not go forward."

 

Chirchir said the state has entered into a non-disclosure government to government deal with Qatar for supply of gas. Coal, he added, will either be supplied by the successful investor or sourced through a government to government arrangement shaped by cost-saving options.

 

The government and African Development Bank are meanwhile working on a partial risk guarantee scheme to be ready soon while the contractor for each of the projects will provide a bid bond.

 

The companies will meet government on February 28 for a pre-bid session where they will raise their concerns on the structuring of the projects.

 

The 10 companies shortlisted for the coal plant at Lamu include a consortium of locally owned Gulf Energy, Indian Tata Power that also separately made it into the final list on its own and Axxaro.

 

Three Chinese firms including Shanxi International Electrification, Sinohydro and a consortium of Shanghai Electric Power and Avic International & Cistenique are also competing for the coal projects.

 

Others are Japan's Mitsui and Company, Marubeni Corporation and Toyota Tsusho. UK-rooted HCIG Energy Investments and a consortium led Greece's Aldwych International, American Capital, BHEL, Group Five, Structured Ingenuity and Pan African Infrastructure Development Fund are also in the final race for the coal plant.

 

 

Source: http://allafrica.com/